1. Different Life Alternatives
Must compare alts for equal service(i.e. alts must end at the same time)
Two ways to compare for equal service:
(1) Least common multiple(LCM) of lives
(2) Specified planning period
(The LCM procedure is used unless otherwise specified)

2. Different Life Example
Compare the machines shown below on the basis of
their (a) present worth, and (b) future worth. Use i =10%
Machine A
Machine B
First cost,$
Annual cost,$/yr
Salvage value,$
Life, yrs
20,000
30,000
9000
7000
4000
6000 3 6
Solution:
(a) PWA = -20,000 – 9000(P/A,10%,6) – 16,000(P/F,10%,3) (P/F,10%,6)
= -$68,961
PWB = -$30,000 – 7000(P/A,10%,6) (P/F,10%,6)
= -$57,100
(b) FWA = -20,000(F/P,10%,6) – 9000(F/A,10%,6) – 16,000(F/P,10%,3)
= -$122,168
FWB = -30,000(F/P,10%,6) –7000(F/A,10%,6) +6000
= -$101,157
(both methods will always result in the same selection; in this case, machine B)